How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Falak Naz Your Own Question

Falak Naz
Falak Naz, Accountant
Category: Finance
Satisfied Customers: 532
Experience:  I am a qualified Chartered Accountant. Currently i am working in financial institution.
16788307
Type Your Finance Question Here...
Falak Naz is online now
A new question is answered every 9 seconds

32. An investors risky portfolio is made up of individual

Resolved Question:

32. An investor's risky portfolio is made up of individual stocks. Which of the following statements about this portfolio is true?
a. Each stock in the portfolio has its own beta.
b. Each stock contributes to the beta of the portfolio.
c. An investor can lower the risk of this portfolio by her choice about personal leverage (lending or borrowing).
d. all of these

33. The weighted average cost of capital (WACC) can be computed using the formula: WACC = (1 - L)re + L(1 - T)rd. Which of the following statements is true?
a. L is debt divided by firm value.
b. T is the personal tax rate.
c. rd is the required return on equity.
d. none of these

34. You are considering the capital budgeting project j with a life expectancy of 20 years. The short-term government rate (rf) is 5%, the beta of firms that produce products similar to project j is 1.2, and the return on the market (rm) the last 20 years has been 10%. What is the cost of capital for this project?
a. 9.00%
b. 10.00%
c. 11.00%
d. cannot tell
36. Calculate the IRR for the following investment project: initial investment is $75,000; inflows are $20,000 for the next five years; required rate of return is 15%. (Round your answer to the nearest whole percentage)
a. 10%
b. 11%
c. 12%
d. 13%

37. Your firm uses the payback method but does not discount any of the cash flows. Calculate the payback for the following investment: A machine costs $200,000 with after-tax installation costs of $15,000. After-tax cash inflows are expected to be 36,000 per year for the next seven years.
a. greater than 6
b. 5.85 years
c. 5.14 years
d. 4.42 years

38. Compute the NPV for the following project. The initial cost is $5,000. The net cash flows are $1,900 for four years. The net salvage value is $1,000 when the project terminates. The cost of capital is 10%.
a. $1,705.76
b. $5,000.00
c. $6,705.76
d. none of these

39. Each year for eight years, an investment will generate incremental sales of $8,000 and cash operating expenses of $2,500. The applicable tax rate is 30% and depreciation is $2,000. What is the net cash flows for each of the eight years?
a. $8,000
b. $6,500
c. $4,500
d. none of these

40 Compute the IRR for the following project. The initial cost is $10,000. The net cash flows are 3,800 for four years. The net salvage value is $2,000 when the project terminates. The cost of capital is 10%.
a. 13.91%
b. 18.91%
c. 23.91%
d. 25.91%
Submitted: 4 years ago.
Category: Finance
Expert:  Falak Naz replied 4 years ago.

 

32. An investor's risky portfolio is made up of individual stocks. Which of the following statements about this portfolio is true?

a. Each stock in the portfolio has its own beta.

b. Each stock contributes to the beta of the portfolio.

c. An investor can lower the risk of this portfolio by her choice about personal leverage (lending or borrowing).

d. all of these

 

33. The weighted average cost of capital (WACC) can be computed using the formula: WACC = (1 - L)re + L(1 - T)rd. Which of the following statements is true?

a. L is debt divided by firm value.

b. T is the personal tax rate.

c. rd is the required return on equity.

d. none of these

 

34. You are considering the capital budgeting project j with a life expectancy of 20 years. The short-term government rate (rf) is 5%, the beta of firms that produce products similar to project j is 1.2, and the return on the market (rm) the last 20 years has been 10%. What is the cost of capital for this project?

a. 9.00%

b. 10.00%

c. 11.00%

d. cannot tell

 

36. Calculate the IRR for the following investment project: initial investment is $75,000; inflows are $20,000 for the next five years; required rate of return is 15%. (Round your answer to the nearest whole percentage)

a. 10%

b. 11%

c. 12%

d. 13%

 

37. Your firm uses the payback method but does not discount any of the cash flows. Calculate the payback for the following investment: A machine costs $200,000 with after-tax installation costs of $15,000. After-tax cash inflows are expected to be 36,000 per year for the next seven years.

a. greater than 6

b. 5.85 years

c. 5.14 years

d. 4.42 years

 

38. Compute the NPV for the following project. The initial cost is $5,000. The net cash flows are $1,900 for four years. The net salvage value is $1,000 when the project terminates. The cost of capital is 10%.

a. $1,705.76

b. $5,000.00

c. $6,705.76

d. none of these

 

39. Each year for eight years, an investment will generate incremental sales of $8,000 and cash operating expenses of $2,500. The applicable tax rate is 30% and depreciation is $2,000. What is the net cash flows for each of the eight years?

a. $8,000

b. $6,500

c. $4,500

d. none of these

 

40 Compute the IRR for the following project. The initial cost is $10,000. The net cash flows are 3,800 for four years. The net salvage value is $2,000 when the project terminates. The cost of capital is 10%.

a. 13.91%

b. 18.91%

c. 23.91%

d. 25.91%

Customer: replied 4 years ago.

Can you please show me the calculations used to answer problems 34-40 so that I will know how to do them?

 

Thanks,

 

Expert:  Falak Naz replied 4 years ago.

HiCustomer

its nice you wish to know about the calculation because its always better to understand than to copy, please click here for solution of all the requested question if you have any other query please feel free to ask.

Falak Naz, Accountant
Category: Finance
Satisfied Customers: 532
Experience: I am a qualified Chartered Accountant. Currently i am working in financial institution.
Falak Naz and 6 other Finance Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
< Last | Next >
  • http://ww2.justanswer.com/uploads/RA/rakhi.v/2012-7-3_14374_RakhiVasavadaL.64x64.jpeg Rakhi Vasavada's Avatar

    Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
  • http://ww2.justanswer.com/uploads/BU/BusinessTutor/2012-2-2_115741_Kouki2.64x64.jpg Manal Elkhoshkhany's Avatar

    Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    1890
    More than 5000 online tutoring sessions.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    1755
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JK/jkcpa/2011-1-16_182614_jkcpa.64x64.jpg JKCPA's Avatar

    JKCPA

    CPA

    Satisfied Customers:

    838
    Bachelors degree and CPA with Accounting experience.
  • http://ww2.justanswer.com/uploads/starside8/2010-2-16_55433_DSCN1175.JPG Eric's Avatar

    Eric

    Financial Manager

    Satisfied Customers:

    558
    Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.
  • http://ww2.justanswer.com/uploads/FA/fastfile/2011-12-15_23139_Klein2011small.64x64.jpg R. Klein, EA's Avatar

    R. Klein, EA

    Accountant

    Satisfied Customers:

    397
    Intuit Ask a Tax Expert. QuickBooks Certified Pro Advisor (all editions)
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    324
    NASD Licensed Rep, 1997-2001, Business Attorney